Volkswagen Plans Biggest Job Cuts in Its History

German auto giant Volkswagen is reportedly considering one of the largest restructuring exercises in automotive industry history, with plans that could result in up to 100,000 job cuts and the closure of four manufacturing facilities in Germany, according to people familiar with the matter.

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The proposals are expected to be discussed during a supervisory board meeting on July 9, as the company seeks to address mounting financial pressures stemming from slowing European demand, rising competition from Chinese electric vehicle (EV) manufacturers, and U.S. import tariffs.

Four German Plants at Risk

Sources indicate that Volkswagen is evaluating the closure of its plants in Hanover, Zwickau, Emden, and Audi’s Neckarsulm facility.

Also Read: Mercedes-Benz Asked Employees to Work Longer Hours for Same Pay

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The move could directly affect more than 45,000 employees, in addition to approximately 50,000 workforce reductions already under consideration.

If implemented, the combined job losses would make it the largest restructuring in the history of the global automotive industry, surpassing many previous cost-cutting initiatives undertaken by major automakers.

CEO Pushes for Deep Transformation

Volkswagen CEO Oliver Blume and Chief Financial Officer Arno Antlitz are reportedly leading a comprehensive transformation strategy aimed at improving the company’s long-term competitiveness.

According to reports, the plan includes reducing capital investment by around 15%, bringing total spending over the next five years to just over €130 billion ($148 billion). The restructuring could also involve separating Volkswagen’s core passenger car business and its components division into standalone entities.

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A Volkswagen spokesperson declined to comment on the reported plans but acknowledged that the entire group “must undergo far-reaching change” to remain competitive.

Strong Opposition Expected

The proposed overhaul is expected to face significant resistance from Volkswagen’s powerful works council, Germany’s IG Metall labour union, and the state of Lower Saxony, Volkswagen’s second-largest shareholder.

Also Read: General Motors Replaces 1,000 Workers with 50 Robots

Union representatives have already warned they will oppose any plant closures or large-scale layoffs. Lower Saxony’s government has also indicated it would not support such measures.

Volkswagen previously attempted to shut German plants in 2024 but was forced to scale back its plans following strong opposition from employee representatives.

Growing Pressure from Chinese EV Makers

Volkswagen’s restructuring efforts come as Chinese automakers continue to gain market share both in China and Europe.

The company lost its long-held position as China’s largest automaker to BYD in 2024 and slipped further in 2025. Industry analysts say rising competition from brands such as BYD, Chery, SAIC, and Leapmotor, combined with weakening EV demand in Europe, has intensified pressure on traditional European manufacturers.

Analysts believe Volkswagen must not only reduce costs but also accelerate the launch of more competitive products if it hopes to regain market momentum.

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